The health care system in the United States has gone through a process of rapid evolution over the past three decades. Factors, including the increasing role of the government, the rise in health care costs, and the advent of “managed care”, have resulted in the growth of the bureaucracy for administering the health care system. The increased bureaucracy has greatly increased the clinicians' and the medical service providers' administrative work, and severely constrained the physician's ability to control the medical care delivery process. In addition, the reimbursement system has become too convoluted to understand for an ordinary person.
As shown in FIG. 1, a medical service provider must manage many types of administrative processes to conduct the billing and reimbursement process, including: credentialing of every medical service provider, such as a medical practice or physician, by each managed care entity on a periodic basis; service contracts that each medical service provider has to make with the various insurance companies; the process of claim submission to the various payers; the follow-up required, from the resubmission of “lost” claims to the petitions against denied claims; management of the reimbursement information to help the medical service provider's decision-making process; and resolution of continuing issues about patient care or reimbursement for services provided. New products and services which have been introduced to reduce costs to both payer and purchaser, such as health maintenance organizations, preferred provider organizations, and point of service health plans, often cause obstacles which make the administrative process a losing proposition for the medical service provider.
For instance, the medical service provider's office has to be able to distinguish between the various provisions and rules of various programs offered by each company, in addition to dealing with numerous insurance companies, managed-care entities and governmental programs such as Medicare and Medicaid. In addition, there are wide variations in payment rates, authorized procedures, drug formularies, co-pays, risk deductions, and other adjustments in different insurance plans. The current billing and reimbursement methodology results in a highly fragmented process in which various responsibilities may lie with various participants, while the ultimate administrative burden remains on the medical service provider.
The remedies offered the medical service provider thus far have been piecemeal and inadequate to relieve the problem. Following is a brief description of remedial methodologies:
In a direct billing methodology, as shown in FIG. 2, the medical service provider purchases and deploys sophisticated practice management software, and then independently handles the billing and collection process in-house. The direct billing method raises two concerns. First, it leaves all the administrative burden of dealing with managed care squarely on the shoulders of the medical service provider. This is not acceptable to solo practitioners or small practices. Second, the small medical service provider has no bargaining power vis-à-vis the large payers and bureaucracies, such as insurance companies and managed-care entities. A variation of the direct billing system is a Web-based billing system, which is likely to make obsolete the small billing agencies, and may ultimately add to the administrative burden of small medical service provider.
The direct billing methodology provides only limited help to a medical service provider in effectively dealing with the administrative problem of managed care. Small medical service providers lack the resources, such as technical expertise or financial wherewithal, to install and manage highly complex computer systems. In a Web-based billing system, the medical service provider must simultaneously use two different systems to fulfill its needs, which is financially expensive and technologically complex. As managed care becomes more powerful and complex, a lack of access to a sophisticated information system could impair a medical service provider's ability to make sound commercial decisions. In addition, the problem of a high administrative burden for the medical service provider remains unsolved.
In a billing intermediary methodology, as shown in FIG. 3, the medical service provider outsources the billing and collection responsibility to an outside third-party, such as a billing firm, a medical service organization or a practice management service. The medical service provider provides the information from a patient's super bill to the billing firm who enters the information in its computer system for submission to various payers. The super bill is an encounter form listing possible billable conditions for a patient, which is easily filled out by the medical service provider. The patient's super bill information is stored by a medical service provider system in a data format required by the particular billing firm. A variation may be when the medical service provider performs the data entry, and the billing firm does the rest. The billing firm provides periodic reports to the medical service provider.
The billing intermediary methodology has serious drawbacks. First, the billing firm's role is very limited in the value it adds. The billing firm bills and collects but takes no responsibility for the administrative headaches of the medical service provider, such as credentialing of every medical service provider by each managed care entity on a periodic basis; service contracts that each medical service provider has to make with the various insurance companies; management of the reimbursement information to help the medical service provider's decision-making process; and resolution of continuing issues about patient care or reimbursement for services provided.
Second, this method, in its current form, is not amenable to competition. The costs of switching from the billing firm to a second billing firm are high because reliable information is not readily available about such billing firms, and because the medical service provider often has to change from a computer system compatible with the first billing firm's computer system to another computer system compatible with the second billing firm's computer system. The switch may also require the medical service provider to change operational procedures, such as the time period for generating invoices.
Medical service providers have also attempted to overcome the administrative problems of effectively dealing with managed care by increasing the size of medical service provider groups. The physician practice management (PPM) model symbolized the culmination of this trend. However, medical service providers are realizing that the costs of such arrangements often exceed the benefits. While the physician practice management model addresses the problem of administrative burden by taking over that responsibility, the physician practice management model removes the ownership of the practice and some operational control from the medical service provider.
Models such as physician-hospital organization or independent practice association do not even claim to solve the administrative problems in general. They are targeted specifically to contracting issues. Hence they fall well short of solving the administrative problems of effectively dealing with managed care. In short, the medical service provider is still looking for an efficient and cost-effective system to help remedy the administrative conundrum of practicing medicine in general and the convoluted health care reimbursement system in particular.
An object of the present invention is to provide a medical service provider with the ability to search for and choose, as and when needed or desired, from a number of qualified practice management agents readily available on the same Internet-integrated system, which practice management agents would then take the responsibility for managing the administrative processes of the medical service provider including billing and collection.
Another object of the present invention is to allow a medical service provider to make a selection of the practice management agent without material switching costs, without the need to change the hardware or software the medical service provider uses, and without the need to change any protocols the medical service provider follows in its office management or information management procedures.
Another object of the present invention is to provide a singular, vendor-neutral, Internet-integrated computer system that can be used to manage virtually all of a medical service provider's administrative processes without having to integrate various computer and administrative systems.
Another object of the present invention is to make available on the Internet, in a vendor-neutral format, a network of independent practice management agents, each of whom would be able to take over the complete responsibility of managing the billing and collection process for the medical service provider, and which would act as an administrative agent of the medical service provider in regard to its dealings with insurance companies and payers.
Another object of the present invention is to let remain with the medical service provider control of the administrative process, including control over the medical service provider's confidential information, despite the fact that the administrative process management responsibility would be outsourced to independent practice management agents.